Welcome to the Far East Consortium International Limited 2023 Annual Results Presentation. Before we begin, let me introduce the management representatives. They are Executive Director and Managing Director, Mr. Chris Hoong. Chief Financial Officer and Company Secretary, Mr. Boswell Cheng. May I invite Mr. Hoong to start the presentation. Mr. Hoong, please. Thank you. Good morning, ladies and gentlemen. My name is Chris Hoong. I hope you have access to our PowerPoint presentation, because I'll be using that for my presentation. We have also released a very detailed set of results, 60 pages long. I think we pride ourselves as one of the most transparent in term of, you know, our corporate affairs, financial affairs. Every time when we re-release our results, a lot of analysts say: "Wow, your results announcement is very detailed." I hope you had the chance to go through it. What I'll do is to basically just go through the presentation, highlight, I guess, a few key developments, some challenges, some opportunities, and also, you know, how we look at the outlook and what are the key initiatives that we are doing. Those are the things that I hope to cover in my presentation. Just to start, I think if you turn to page, the key themes of FY 2023, I think it sets out really a number of key themes for our results. First of all, I think if you look at the top line number, we have experienced almost top line growth for all four core divisions, namely, property development, hotel, car park, and gaming. Those have experienced all top line growth. Our adjusted revenue reached about HKD 6.9 billion. This is adjusting for. We have an associate company in Australia that is a joint venture company with our partners. We completed a project. You know, if you adjust for that number, it's HKD 6.9 billion. If you exclude that number, it's about HKD 6.4 billion In term of revenue. Our adjusted cash profit, and this is adjusting for depreciation and a number of non-cash item, was about HKD 576 million. The property development business, in term of the adjusted revenue, HKD 4.1 billion. The important thing is that if you look at the cumulative pre-sales, this represents the sales that we have contracted but not booked in our P&L yet, amounted to about HKD 18.7 billion. So these are sales that we have locked in, but we have not basically settled. We did have one project, which was a big one, was slightly delayed to post-year-end, and that's the West Side Place project Stage 2. That was, you know, delayed, and we have now started the settlement of that, and it's progressing well. The HKD 18.7 billion, obviously, is a big number, and it give us very good visibility for what is gonna come in the coming few years. So far as hotel is concerned, we have a top-line growth of 7.4%. I think, you know, we're very proud of this achievement, and if you actually compare ourselves versus a lot of our hotel peer groups, we are one of very few companies out there that is still able to basically maintain a, you know, good, I guess, profitability, even in a very difficult environment. You know, last year, especially, we it was, of course, the end of the COVID restrictions period, but we did have a period of time where we actually was just reopening. Therefore, despite, you know, the business being affected slightly, we still experienced overall a growth. We'll go into detail so far as the hotel business is concerned later on. Car park, 13.6% growth, and that was largely because of the lifting of the COVID restrictions, the return of traffic back to the city, and it's purely 100% organic. Gaming wise, is very, very strong, and I'll go through a bit more about the initiative there a bit later on. The top-line growth was a 28% year-on-year. It, it is still demonstrating very, very strong momentum. We have also made an announcement that we will be spinning off our European gaming as well as hotel, continental hotel business. I'll elaborate a bit more about that later on. Far as the recurring cash flow business is concerned, we, I look at basically, if you split our business into build and sell and recurring cash flow business, the recurring cash flow business, namely hotel, car park, and gaming, the total revenue was up about 11.2%, to about HKD 2.6 billion. With the border reopening, I think we can expect that this business, hopefully, on the hotel side, as well as the other businesses, will gradually recover. I mean, if you think about it, the reopening really only started a few months ago. In Hong Kong, it was really, you know, and then China is maybe December, January, right? So very, very recent. And our year-end is 31st of March, so we still, during this financial period, still has quite a big, a long period of time where we were still subject to the COVID restrictions. T he other thing about recurring cash flow business, one of the achievements that we opened the Dao by Dorsett in London. It is a new service apartment brand under Dorsett. It's doing very, very well. We also opened The Ritz-Carlton in Melbourne, and this was in March. There was not really any contribution from this hotel because it's like opened, I think it was on the late part of March, right? Even though it was in the same financial year, but it was only for a few days, right, in the last financial year. Then we opened the Dorsett Melbourne in April, which was a few months ago. We added about 650 rooms, roughly Car park business, I think you, we, you know, we saw organic growth, I mentioned about it. Gaming business, I think the other sort of highlight was that we also obtained a online gaming license in November 2022. Our thoughts about the gaming business is that we want to segregate it into a separate list go, hence the filing of PN Fifteen, which we now have the green light from the stock exchange. We are going full steam. We're preparing ourself for the separate IPO of that business. I think the other sort of theme for 2023 is the recycling of a non-core assets into projects with higher return, especially given the high interest rate environment. We are very actively reviewing our portfolio to see what assets we should be selling, using the capital for debt reduction or basically reinvesting in higher return project. We've done a few deals last year. I won't go through every single one, includes basically the Vauxhall Square project, the Union Street, Piermont project. We also sold some mature car parks in New Zealand, we then used some of the capital to buy a piece of land in Sai Ying Pun, under the URA redevelopment scheme. The other business which is doing very well is of course our mortgage lending business. It's actually a platform that facilitate our customers to borrow money, secure on first mortgages on residential property. The platform is actually very mature now. I mean, we started this of about six, seven years ago. I'm very proud about what the team has achieved, and they've now completed their seven RMBS offering. The last being one that was done in April, and we are now preparing another one. It is a very high-quality book, and it's doing well, and the growth last year was about 40%. We now have an AUM there of about AUD 5.3 billion, over HKD 20+ billion of AUM in that business. The other sort of core initiative for 2023 is the implementation of the initiative to lower the gearing, and also the interest expense. You'll see actually from the actual numbers that, it's not just us, right? It's everyone is, especially, more proactive corporate are now actually focusing on initiative to try to lower their debt level, reduce the gearing. Likewise, we are doing this the same. To us, a number of very important initiative under that, one is, as I say, you know, we do have a very big amount of contracted presales, HKD 18.7 billion. The priority now is to actually get all that, to turn all that to cash. A lot of our projects are near completion stage, you'll see that basically the short-term liability will naturally go up because we will then use the presales to then pay off, right, the construction loan, which is now happening. That's one important thing to try to lower the gearing number. The other item to highlight, I think, for those of you who are involved in the Westside Place project, it is a very, very big mixed-use project with 3,000+ apartment, two hotels, retail. We are actually in the process of now, we are now finished the project officially, I think, around April, with the hotels now open in West Side Place. The residential projects are now in the process of completion, we are seeing basically almost every day, right, there are completions are happening. That will hopefully help reduce the debt level. The active sell-down of inventory, we have about HKD 5.5 billion of inventory. We recently, for Malaysia, there was actually some inventory stock, and we decided to basically just sell that as well. This is the Dorsett Bukit Bintang, so we are completely out of that and realizing some cash there. The other initiative, I think I mentioned just now, is the non-core. I mean, we have basically the Dorsett-branded hotels, and there are some also non-Dorsett-branded hotels, like the Sheraton, the Ritz-Carlton. We are in the process of basically actively selling down the non-core assets. There are also some minority interests as well. To give you an example, last week, we... Is it last week or this week? We just signed a contract to sell the Sheraton Gold Coast. That is an example, and we've mandated agents to sell the two Ritz-Carlton hotels in Australia. These are a number of examples of initiative that we are doing in term of monetization of some non-core assets. Longer term, for unlocking value, I think I mentioned just now about the PN15 spin-off of Trans World Corporation. We completed a pre-IPO placement for that business. We placed 10% of TWC, raising $20 million, but that equates to a valuation of about $200 million for that business, $200 million for that business. We bought the business for $42 million a few years ago, so it represents a pretty good return. For us, I think a number of important considerations there is, one, is we want to basically have a clear line of business for gaming, allow the business to have the opportunity to grow on its own, and, by doing a separate listing, it kind of facilitate that. The BC business is growing very fast. Of course, it's also very capital hungry. We are in the process of doing a strategic review just to see how we can position that business to capture the significant growth opportunity in the non-bank lending space. We are in discussions with a number of new investors as well, in terms of providing new facility to support the growth of that business. That's kind of the key themes for 2023. I'm not going to spend too much time going through the numbers, because I think it's all pretty clear in the announcement, but I'll give you some highlights. The top line, as I mentioned, up about 7.6%. The bottom line has been impacted, and it's been impacted for a number of reasons. One is we did have a number of lower margins projects that we booked in the second half of the financial year, namely the affordable housing project in London. The Singapore project is actually because we've sold off all the sort of lower-floor units. That's of lower margin. The higher floors will have higher margins, that kind of have impacted the margin as well. So that kind of dragged down the GP margin line. However, if you look at some one-off expenses, we did also have about HKD 187 million. So far as I'm concerned, it's more one-off is, for example, the remittance tax that we incurred in remitting the cash flow from China. As well as. Because it's, again, it's about capital reallocation. So we incurred quite a lot of tax there, and then when we open new hotels, and we have quite a few big hotels that we opened, we incurred quite heavy pre-opening expenses as well. Those actually dragged down the profitability of the business. The other important factor is, of course, interest rate, right? Interest rate has gone up. It has also has a negative effect, right, on the profitability. Having said that, I mean, in term of dividend, the board, you know, debated yesterday. We decided that we will, given the macro uncertainty in the macro environment, we declared a dividend of HKD 0.10 final, and HKD 0.04 we paid already is the interim, so HKD 0.14 in total. Compared to HKD 0.20 last year, it was a reduction. Having said that, last year we did a bonus issue of shares. If you adjust for that, right, the reduction in dividend per share, cash dividend per share, is about 23%. Given the situation, I think is a fair arrangement for both for our equity common shareholders as well. The other sort of highlight I mentioned just now in the pre-sales number, HKD 18.7 billion. It's very healthy. Of course, you know, West Side Place was delayed. If you compare the actual sales last year, you know, including the HKD 3 billion that we realized, the sales last year as a whole for property has been actually pretty robust. Property development, you can see we actually recognized HKD 3.5 billion in revenue. We did have an increase in cumulative pre-sales of about HKD 2 billion. We did over HKD 5 billion of sales last year in property development. That's actually a very, very strong number. So far as the NAV is concerned, I mean, it went down 5.5%, and this is adjusted for our hotel revaluation surplus. So that you are aware, we don't realize the profit that we make on hotel development because we own it for our own operation, right? We hold it for our own operation, so we don't mark-to-market the hotel value. For example, when we completed the Ritz-Carlton Hotel and the Dorsett Hotel, on our book, it's book cost, not the revalued amount. We do a revaluation or valuation by independent third party for banking purposes, the value of the hotels every year, and there is a surplus of about HKD 19 billion in that. You don't see that unless we sell the hotels, right? It's just something to think about that, you know, we do have a lot of revaluation gain that we have on our balance sheet associated to hotel development, which are not mark-to-market. That's something to note. Turning on to the next page about the property pipeline. I think in the coming years, the 2023, 2024, you'll see that actually West Side Place Stage 2 will be a major contributor, and also Hyll on Holland in Singapore will be a major contributor. In addition to that, we are also going to be booking a number of pre-sales in Hong Kong, Mount Arcadia, Manor Park, Royal Riverside, and California Garden. These are China projects. We have some inventory that we are selling. This will be, I think, you know, I can be reasonably confident that in term of the revenue contribution from this project, is actually gonna be quite meaningful. In particular, you know, we are already doing the settlement now for West Side Place. The following year, Kai Tak, which we have already pre-sold to China Light & Power, there will be over HKD 2+ billion coming back onto our balance sheet. We have locked in that contract already. Singapore, there's a small project, but the others of key projects are the Dorsett Place, a waterfront project in KL, the Manchester project, the London project, Aspen, and the Queen's Wharf Tower Four project. These are gonna be in the following year. The pipeline in the coming few years is actually quite healthy. If you turn to page, the following page about the margin, I think I mentioned these margins were... If you look at the gross profit margin before depreciation, you'll see that actually, except for the property development business or the other divisions, maintain a pretty healthy margin. Hotel was 52%, car park was 19%, primarily because it's all third-party management. Gaming, 60%. This is about 80%. The property development business was 19% versus 32%, primarily because of the factors I mentioned. We have a number of low-margin projects that we've booked. Affordable housing in London is one, and is something which we can't avoid because as part of the planning that we obtain from the government, we do have to deliver a certain quantum of affordable housing, and that essentially, you don't make any money at all. We pre-sell it, and so it's funded by the buyer anyway. When you put it on your P&L, it strikes down the overall margin. That's the reason, I think, for the impact that you see in the P&L. Just to give you some flavor as to how I look at the property market as a whole. With the reopening of the borders, especially, you know, Asia versus Europe and Australia and all that, we're actually seeing quite an increased flow of traffic. Student numbers in Australia and the U.K. have gone up substantially. In the CBD in Melbourne, we are actually seeing a very low vacancy rate. The take-up rate for new apartments has been strong, and we've seen rental actually shooting up quite dramatically in the magnitude of, like, 30% a nd vacancy rate, I think, is, like, 1% or something. What it's saying is that there appears to be a demand-supply imbalance at the moment in certain, especially in the locations that we are operating. We're seeing actually a slowdown in the supply for a number of reasons, because maybe it's more difficult to obtain now development financing. A lot of smaller developers are not building. Contractor market is very tight because of, you know, partly because of COVID. That has resulted in a slower supply side, and yet you'll be seeing actually demand picked up in a number of regions. That has resulted in some demand-supply imbalance in some of the locations that we are in. For example, Melbourne, Manchester is also another example that we're seeing. It's actually playing quite well for our positioning as a whole. The next page, I want to talk about the impact on Forex. As you know, we report in Hong Kong dollar, and yet we do-- because our business is actually pretty diversified, we are operating in multi jurisdictions. We are in Australia, we are in U.K., we are in Malaysia, we are in Singapore, China, and Continental Europe. When you translate your numbers back into Hong Kong dollar, and you will naturally see some big fluctuation, especially our business, where we are actually quite geographically diversified. Last year happened to be a negative year because almost all currencies versus U.S. dollar declined, right? Australian dollar declined, renminbi declined, euro declined, pound declined, and that has impacted our balance sheet equity. It's short term, right? I mean, we have seen basically the other way, so in some years, right, it's up, like, HKD 2 billion in equity, and then some years you're down HKD 2 billion. What I'd like to say is that, look, you know, the way we operate, we don't hedge the equity. It's very expensive to hedge equity. We hedge by taking up local currency debt to match against the pre-sales. What you kind of want is basically your equity fluctuation, right? It's not, it's not fundamental. I think that you'll find that, in some years it will be very much in our favor. What it meant last year was that if exchange rate had maintained constant, our equity would have been HKD 1.7 billion higher. That's the financial impact analysis, FYI, right? Next page is about unlocking value. I think with what we are doing now, the key initiatives that I mentioned, the spin-off of the gaming, as well as continental European hotel business, the selling of some non-core assets. I mean, if you remember, we actually did have an initiative to do a hotel REIT as well a number of years ago. We put that on hold, primarily because we had this social incident in Hong Kong and then followed by COVID. It's been, like, four years of, like, pretty tough conditions, so we put that on hold. It's still not the right timing to be considering that at all, because interest rate is very high. There will be a moment when the market conditions will be right for that. It still is on our agenda, I just want to say. Also, I think the strategic review on the BC hopefully will yield something there as well. All these, right, are opportunities for us to unlock value for our shareholders. Moving on to the next page. I think you see that our gearing ratio has gone up last year, primarily because a number of our projects, right, are getting to a more mature stage of development, like West Side Place, right? You're getting to the end, so your construction loan is maxed out, and then your pre-sales is maxed out, and then you don't have the revenue in yet, or You know. You know, you'll have the short-term spike in the gearing level. We did a calculation and say, "Look, what if we realize'', and then we did the figure for, I think for last Friday and say, "Look, we actually already settled about HKD 2 billion of West Side Place, like, as of Friday last week." That would bring the gearing level, this is measured on the basis of net debt to total assets. It would bring it down from 35.4%-32.7%, and the debt will continue to come down as we settle. Just want to, like, for those of you who are looking at a balance sheet, right, to be aware of the dynamics of our business. The initiative to reduce debt, I think we've seen in the market, you know, a number of big corporates announcing quite major corporate transactions. Our approach is that we are really looking to monetize some of the non-core, some of what we view as more mature assets. Our target is to try to reduce the debt level by about HKD 6 billion-7 billion. The key initiatives are, number 1, monetizing existing completed inventory. As I mentioned, we have HKD 18 billion of presales that we've locked in. On stage one alone, right, we've now completed over HKD 2 billion of pre settlements, so that we paid down HKD 2 billion already. We are selling down some of the inventory, like Dorsett Bukit Bintang is an example. We signed a contract, a few weeks ago. We sold HKD 200 million worth of inventory. We are launching a number of major campaign to basically actively monetize those inventory, right? That will be, I think, one of the key focus for us in the coming year. Actively selling down non-core assets. I mentioned about the Sheraton Grand Mirage deal. It's already signed, you know, it was signed last week. Our partner made an announcement. We bought the asset for AUD 140 million. About six years ago, we sold it for AUD 192 million. A lot of people say, "Oh, high interest, you can't, you can't get this asset." No, you can, and you can sell it at a very good valuation as well. It depends on the process you run. There are challenges, but we are still able to actually do a successful deal. We are earmarking to, you know, of course, there are some non-core, which I mentioned, some mature car parks. We are in the process of actually doing another deal at the moment. We did a New Zealand sale completed, that was post-year-end. These are some of the examples that we are actively actually going down that path. The contracted presale, in particular, I think, there are two main project. One is a Kai Tak office project. If you go past the Kai Tak Stadium, you'll find that there are actually two new buildings next to the main stadium, and that's ours. One is a hotel, and we're building a landmark Dorsett there, a flagship Dorsett there, and then there is an office block, right? Office is not easy, and we are very, very happy that we actually locked in the sale with CLP a few years ago, and this is earmarked for completion in FY 2025, but it's big sum, right? It's over HKD 2 billion. That's one of the sort of priority for us to get it over the line. Then there's the spin-off of the gaming business, which I mentioned, so that should hopefully bring new, fresh equity onto our balance sheet, and that's one of the initiative I mentioned. Just to give you some analysis on the liquidity position. The short-term debt looks high, however, we have repaid down the HKD 4.5 billion, 4.5% notes already. We are, I mean, there is one due 2024, which we will be paying down. A number of loans are being rolled over. There's also HKD 2.5 billion of short-term liability, which are actually not really due, but classified short-term because of the repayable on demand clause that we have in our loan agreement. We have a liquidity position of HKD 6.5 billion on our balance sheet, and undrawn facility of about HKD 7.3 billion. In total, available resources, about HKD 14 billion, and presales of HKD 18.7 billion, right? If you add the two together, it's over HKD 20 billion. You know, that's how I look at the numbers. In addition, we still have 5 hotels which are unencumbered, and inventory of about HKD 5.5 billion, which is unencumbered. In term of our CapEx, right, I mean, we have purposely slowed down our CapEx, and you can see that, in fact, we've reduced it substantially to just below, to just over HKD 1.7 billion. It's a comfortable level, and those are primarily hotels that we are completing. If you turn to the page on presales, we give very good transparency about which projects, what is the GDV and what is the presales that we have achieved as at 31st of March. In summary, we have about a sales resources, about HKD 61 billion. We, you know, pipeline, I think, is sufficient for eight years of development. We don't need to buy land for the next eight years, and we are still okay, right? That is something worth noting. We have now locked in HKD 18.7 billion of presales. That give you an idea as to the longer-term visibility of our development business. The next few pages are really going into project by project, what we have completed. I'm not going to go into very detail on every one of them, but just to give you some examples, the Star Residences in Gold Coast, we opened it, we completed it last year. We opened the hotels, its 313 rooms. It's called the Dorsett Gold Coast. If you happen to be in Gold Coast, please stay with us, and make sure you call Boswell and or Jasmine, you know, they'll arrange a special upgrade or rate for you, it's fantastic hotel. The apartments we have now all sold, we got back some good cash. The Meadowside development in Manchester, a number of my friends who bought it have calling me and say, "Fantastic!" They're getting a very good yield, very easy to rent out. They're all making money. That was completed in the last financial year. Hornsey Town Hall, Block A was completed. Well, we had just started the handing over Block B. The Town hall itself is primarily 67 service apartment rooms, and then you also have a facility that you can rent out. That is earmarked for completion in this financial year. Upcoming project for completion, Queens Wharf Residence, Tower Four. I think this is largely sold out now, pre-sold now. The Queens Wharf Residence, Tower Five, as well. The construction on those two towers are ongoing. Kai Tak Residential, this was a project that we're doing 50/50 with the New World Development. That's progressing. I think we are getting the pre-sale consent now. That's kind of give you a quick sort of summary of some of the sort of live project. I don't think we have Aspen here, but Aspen is also a very big project in London that we are undertaking. If you turn on turn to the hotel operations, you see that actually Hong Kong number was a little affected. Last year, we had a fantastic year with the quarantine stay by the government, then they announced, I think in December, that quarantine is no longer required. All of a sudden, we've got to change that back to our normal mode, there was, like, a few. Of the six months in the H2, right, I think at least three or four months was readjusting back to normal operations. Like this hotel, right? I mean, this was a quarantine hotel before, and now it's, you can see there's a lot of hotel guests, right, staying here. We are also reopening the restaurants to outside, and we have got this very famous Michelin Star restaurants, so you should come and try, open. It did affect in the H2, right, in term of the hotel occupancy level. I'm glad to say that, you know, things are getting back, very much back to normal. Overall, for hotel, you see that the revenue was up about 7.4%. RevPAR number in Europe is almost double. I think China was the weak point last year. Actually, more recently, we've seen actually China number recovering very, very strongly. I think you'll see actually in the first half of this year, China number is gonna be up. That's kind of a quick overview of the hotel operations. A number of, I think we have some photos of our new hotels here. Dao by Dorsett is a new brand, a service apartment brand that Winnie spearheaded, and it's a very successful product. We also have rebranded our project in Singapore, a joint venture project. It was called Oakwood before, now it's called the Dao by Dorsett Singapore, which is also doing very well. The Ritz-Carlton, Melbourne, I think for those of you who may be planning a trip to Melbourne, please try our Ritz-Carlton Hotel. Fantastic. It's the best hotel in Australia. You go up to the 80th floor, and you can see the entire Melbourne CBD. Fantastic hotel. Turning on to the next page, right, in term of pipeline, we are adding a few more hotels. One in Hong Kong, which is the Kai Tak Hotel. The Queens Wharf Hotels will be ready hopefully in the next few years. UK, we are building the Hornsey, Dal, and also Canary Wharf, we're building a hotel. These are new additions, but this year, I think the growth from new hotels will be mainly from the new hotels that we opened last financial year, like the Ritz-Carlton, the Dorsett Melbourne, and also the Dao Shepherd's Bush. The new addition, Dorsett Melbourne, for those of you who wants to experience Dorsett in Melbourne, try the Dorsett Melbourne. It's a fantastic hotel, and we have our chief designer, Wendy, here, so if you have any complaints, speak to her. She's here. The next one is the Dao, Hornsey, which I mentioned, Kai Tak. Kai Tak is, it will be a landmark hotel, and this is right next to the stadium, the sports stadium. This will be the largest stadium in Hong Kong. I think in terms of capacity, 3 x the size of Hong Kong Stadium. All, in the future, Rugby Sevens, all the concerts, every, all the big events, right, will be held in this venue, the sports park in Kai Tak. The government has spent billions of HKD into the redevelopment of the old Kai Tak site, and CLP has chosen the site to be their headquarters in Hong Kong a nd it'll be happy to have our flagship to be opened there next year as well. That's the other sort of major project that we are undertaking at the moment. Sorry, I'm mindful of time. I'm overrunning a bit, but I'll be very quick on the next few slides. Car park operations. We recently increased our stake from 77.8% to 90.4%. There were some management changes. We discovered some issues, and we basically had a dispute. Now that that is resolved, we are moving forward. We have increased our stake. The minority shareholders surrendered their shares to us, so we are embarking on a new growth chapter. I think this is a good move. Within that portfolio, we have more focus on third-party management now in that. Yesterday, I spoke to our guys, even in Hungary, we are now winning new contracts. I think we got two more shopping mall contracts that we've won, a few thousand base. I think the team is doing reasonably well. Our gaming operations, I think the big game changer will be the opening of Queens Wharf. It's progressing. I think there was some delay in the construction, however, we are now looking to open the first phase, which is the casino floors, and two hotels in the Q2 of 2024. This will be next year. Just a reminder, it's a 99-year license with 25-year of exclusivity. We have 2,500 slots machine and unlimited number of tables allowed on that site. The next slide is Transworld. I think you see that after gaming tax revenue was up 28% to HKD 300 million, this exclude the hotel that Transworld own. It is demonstrating actually a pretty good growth momentum. We do see actually good opportunities in the region that they operate. It's just that from our perspective, we would prefer that those opportunities are captured by a separate list go, hence the initiative to spin that off. And hopefully, the gaming license, the Malta online gaming license that they have is also can add to the growth momentum of the business. We are not launching that until I think, we're in the process of basically doing the system audit and selection. Hopefully, that will be done later part of this year. Then we can launch it. BC Invest, I think I mentioned just now, I wouldn't elaborate too much. You can see the historical growth chart. The new development there is that we acquired the remaining stake in Mortgageport, which is a retail mortgage broker in Australia. We now have two avenue of distribution so far as the mortgage product is concerned. One is the retail channel. This is direct to C. We also have the wholesale channels as well, which is a dual engine approach in term of tackling that business. I think at some point, this is also a good spin-off target. Not the right time yet, given, you know, I think we are still seeing that the business has just crossed over the inflection point in term of profitability and the profitability growth in that business. Once you get to a certain size, right, you don't need to build any more the infrastructure overhead. Every single dollar of loan that you originate, the profit, which is the NIM, right? I mean, for those bankers here, you understand NIM, net interest margin, right? It goes straight to the bottom line. Your overhead is not growing, and the AUM growth will drive the NIM growth, which will go straight to the bottom line. That's what we are experiencing. I think we have just crossed over the inflection point now. Hopefully, in the next few years, this will be a good contributor to us. Give me five minutes just to summarize. The key outlook, I think, in term of balance sheet management, we are unlocking value, we are reducing debt. We are targeting HKD 6 billion-7 billion of debt reduction. We are very focused on selling down the inventory. We are selling down some non-core assets. We are going to be unlocking those values that has been on the balance sheet for a number of years. We have HKD 19 billion of revaluation surplus on our balance sheet, that give us actually very good ammunition. We have, on the property development side, you know, a significant HKD 18.7 billion of existing stock that we are actively selling down. The presales that we have locked in will provide very good visibility. The hotel sector is recovering. I think the worst is over now for hotel, given the, you know, the reopening. It's gradually coming back to normal. I don't think we are optimal yet. I think there's still scope for growth, but the signs are good across different regions, China, Hong Kong, Europe, Asia. It's all demonstrating, you know, stabilization, which is good. The car park portfolio will grow organically, especially on the management business side. The new property openings, Queens Wharf, and also, new hotels that we opened will generate additional cash flow for the business. BC, as I mentioned just now, is demonstrating actually good growth opportunity. Last but not least, is the ESG initiative. We have a very strong team, headed by Winnie, on the ESG front. We are very focused on the social aspect, very focused on corporate governance as well as environmental. For hotel, to give you some example, I was just listening to Winnie's presentation yesterday. Like, you know, in the hotel, if you choose not to use the toothbrush, the amenities, we give you some points so that, you know, we try to basically incentivize customers to use less of the disposable item, right? This is one of the example. On the social aspect, you know, the positive social impact initiative that has been put in place, I like, I keep seeing a lot of social media reporting about our initiative and all that, very, very positive. You know, for those who know Winnie, she's very, very passionate about it. She heads up that initiative, well done to her. On the corporate governance side, you can tell from our result announcement how detailed we are. I've seen a lot of people, just like a few pages of summary of results, but we actually went to the extent of providing you the analysis of every business, breaking it down so that you can have a good understanding of our financials. We are very proud that, you know, with the efforts that we've put together, we've won a lot of corporate awards last year. You know, I think we were named by FinanceAsia as one of the best company in Hong Kong, best IR company, best annual report, best investor meeting. These are all attributable to the team efforts, and I'm very proud of the team. With that, I would like to conclude my presentation. Thank you very much. Thank you, Mr. Hoong. We now comes to the Q&A section. If you have any questions, please raise your hand. For online investors, if you have any questions, please type it in the Q&A box. We will read it out one by one. Thank you. I may just start on the online questions, yeah? One of the question is. Please introduce about your direction for future, development, direction and strategy. I guess we will continue to focus on our core businesses, which are property development, hotel development, ownership, operations, car park operations. I think the opportunities for us at the moment, is that we are going to be actively unlocking some value on our balance sheet, reduce the debt level, recycling the capital in some extent to higher return project. I mean, because of higher interest rate, right? We've got to be very disciplined about making sure the investment that we make generate adequate return. In the past, maybe you know, when interest rate is at 1%, 2%, you'll be happy with 15% return on equity. Now, you've got to aim for above 20% return on equity to make it worthwhile, right? So those will be the very, you know. Having a more disciplined approach in term of capital allocation is gonna be important. The growth opportunity, as I mentioned, is still gonna be in cities where we see population growth, London, Manchester, Singapore, Melbourne and Brisbane. I mean, these are locations where we are seeing very good population growth. Do we need to. 人 口 增 长 的 地 方 ， 就 是 刚 才 讲 ， 就 是 伦 敦 ， 曼 城 ， 新 加 坡 ， 澳 洲 就 墨 尔 本 ， 这 个 Brisbane。 这 些 地 方 都 是 体 验 到 一 些 人 口 增 长 。 另 外 就 是 刚 才 我 都 有 说 过 ， 就 是 个 供 应 上 呢 ， 其 实 是 短 缺 的 ， 就 是 有 个 供 应 的 短 缺 。 见 到 其 实 疫 情 之 后 呢 ， 就 那 些 人 开 始 学 生 又 开 始 回 去 这 些 地 方 了 ， 见 到 其 实 有 些 挺 好 的 增 长 的 机 会 ， 就 把 握 这 些 机 会 了 。 另 外 就 为 什 么 供 应 少 了 呢 ？ 就 因 为 有 些 小 的 发 展 商 也 都 没 有 这 个 能 力 去 集 到 足 够 的 资 金 去 发 展 ， 就 是 尤 其 是 物 业 发 展 ， 你 需 要 大 量 的 资 本 金 ， 这 些 就 是 给 到 一 些 比 较 成 熟 点 的 企 业 ， 譬 如 说 远 东 发 展 ， 一 些 新 的 机 会 在 里 面 。 我 们 都 是 集 中 于 几 个 我 们 的 主 要 的 业 务 啦 ， 哈 ， 刚 才 讲 就 是 酒 店 ， 这 个 住 宅 开 发 和 这 个 停 车 场 业 务 。 至 于 这 个 ， 这 个 博 彩 的 业 务 呢 ， 我 们 是 会 独 立 在 香 港 上 市 的 ， 这 个 是 现 在 是 进 行 着 这 件 事 的 。 Another question is, any specific plan to reduce debts or gearing ratio? What is the expected gearing ratio? I think I mentioned in my presentation, I think we are targeting a HKD 6 billion-HKD 7 billion debt reduction over, I think, the next, I would say, you know, 12 to 24 months, right? Can't give you a specific date. I mean, it hinges on how quickly we can monetize. One thing for sure is that the settlement of some big projects are happening. To give you an example, the West Side Place project, as of Friday, we've settled already HKD 2 billion, right? That number is coming down quite rapidly. We have also, for example, the CLP project, another HKD 2+ billion there that is going to come back onto our balance sheet. Sale of inventory, right? I mean, we have over HKD 5 billion of inventory. We are actively selling that down. We just signed a contract, as I mentioned just now, to on the remaining block, remaining inventory in Dorsett Bukit Bintang, that's like HKD 200 million. Selling some of the non-core assets, the Sheraton Gold Coast is an example. That will help actually bring in cash back, reduce gearing. Those are a number of the initiative that we are doing, but the target is HKD 6 billion-HKD 7 billion debt reduction. Given the sales of the property is the major business, any expectation or improvement in the coming property development, property margin? Yeah, I think last year, I mentioned we had one big affordable housing project that we completed that kind of dragged down the margin. I think Australia, West Side Place margin is, I think it's reasonably good. I don't want to give you a specific number, yeah, I mean, I think, I hope we can see a, you know, a recovery in the margin in the property development side. Yeah. That's another question from the online. AUD 33 million profits on AUD 1 billion assets, which is talking about the mortgage business. With a higher interest rate coming up and also lower stock valuation expecting, what is the impact? What is the business hurdle we are seeing? The BC business is actually a platform business. It's the AUM is basically the assets that BC is managing. I mean, are there stress in the mortgage market? I think with rise in interest rates, there will always be stress. Are there significant risk? I mean, the LTV for that portfolio is actually very low. It's about 60%. We always do stress tests on borrowers anyway. It's floating rate, right? It's not like you fix the rate you are subject to your higher floating rate cost, you're stuck with fixed rate on this. It's a floating rate, right? We look just like any banks, right? We look at the NIM, right? I think there's scope for NIM expansion in that business. Especially, I think the view from a lot of economists is that, you know, we are, if not peak, almost at the peak in term of interest rate cycle. You'll find that actually, it's still a very liquid market in the capital market in RMBS. Like, you know, nobody expected that we would be able to complete so many RMBS deal despite the market conditions, right? One of the reasons is attributable to the high quality of the asset portfolio loan. We did a rating for our last bond. It's, I think, over 90% is Triple A S&P rated. So very high quality paper. And the buyers or the investors are mainly insurance company, pension funds, sovereign wealth fund. Even, I don't think I can name the bank, but even a very big international banks came in and bought the paper as well. This is a very, very high quality asset under BC. The risk is not really taken on by BC or FEC, because it's non-recourse, right? Those liabilities are actually taken by the investor, and that's why the rating and all that is important. It's on a non-recourse basis, and we are managing the assets, and our income is basically the net interest margin that we get. The market remains very liquid, as I mentioned. This is an asset class that all the banks are holding, right? I mean, this is the bread and butter of HSBC, Hang Seng, ANZ, you know, these are their bread and butter, right? It's just that we are there because we, you know, in Australia, for example, 50% of the mortgage, residential mortgage business are done by non-banks. The banks only account for 50%. The other 50% is non-banks. We have some room there for ourself, right? We started this business to, you know, to facilitate our customers. It's just grow way beyond its original mandate. The FEC customers now account for less than 1% of BC's business. It's kind of like we didn't expect that they would be so big in term of the market. Yeah, I mean, we were in the, in a good spot. I mean, the NIM has compressed because of higher interest rate, but it will come back up. At the moment, we are very focused on basically making sure the infrastructure, the setup, the credit team, the loan processing team, the loan administration team, everything is set up properly so that we can handle a bigger volume. From now on, it's basically even because we've crossed the inflection point, right? It's, hopefully just gonna be better and better from now on. Yep, sure. Thanks, Manny, for the very comprehensive introduction and presentation. This is Doreen from ANZ Bank. I've got two questions. First of all, regarding the GP margin, we just mentioned about there will be a recovery in the coming two to three years. We'll just want to ask, long run-wise, given the cost inflation as well as, you know, shortage of labor overseas, how do you see this margin, especially with the property development in the coming years, three to five years? Is it still under pressure or not, especially with the property development side? Second question will be, any new land purchase planned in the coming three to five years, and what kind of geographic you're looking at? Thanks. I think, there will be some pressure on the GP margin. I think with real estate development, I don't think the impact is going to be very significant. I think, the key is, it's more, I think, gonna be on construction cost inflation. We are trying to pass on the price increase to our customers as well. I mean, like any business, right, you will try to protect your profitability. Of course, for the older projects that you have already pre-sold, we typically will lock in the price very early on and pass on the cost inflation risk to the contractor themselves, right. For new projects, we will be also taking that approach. Interest rate, we can't, you know, we can't, we can't control. You know, that's why there's always gonna be the argument for investing in property, because the replacement cost is always gonna be more and more expensive, right? Then, for those who bought your property 20 years ago compared to the property price now, I mean, yes, there are cycles up and down, up and down, but the longer term trend is still up, right? To answer your question, yes, I think there will be some temporary pressure on the margin, but long term, you know, we are all looking to pass on the cost increase to our customers. Land purchase plan. At the moment, honestly, as I mentioned, our pipeline, I think we have enough pipeline for eight years. We are not in a hurry to replenish, and we are very cautious in assessing. It depends on the sales momentum. If we digest a lot, we will replenish. Otherwise, we would rather focus on digesting rather than buying new land banks at the moment. Yeah. Any refinancing plan for the perk next year, 2024, October, and any bond tender plan? We are always evaluating opportunities. I think it will all depends on the market conditions as well. I think if market conditions are right, then we'll go ahead. At the moment, I think the market is looking for stabilization. I think stabilization is gradually happening. You know, watching the market closely, and when there is a market window, then we'll do it. Yeah. Thank you, Mr. Hoong. Sorry. Yeah. Please give microphone to this- Hi. Gentleman. Thank you. Good morning. This is Phil Song from KBW Capital. What's your average financing cost in last year? Also, what will be the average financing cost for the coming year? For the financial year 2023, the average financing cost is about. No, I think the spread, right, is about 100+ basis points. Of course, the benchmark rate is the benchmark rate, right? I mean, there is definitely pressure on that. We think that, you know, in terms of spread, we still actually one of the more better credit out there for banks. Yeah. It's depending on the currency. Hong Kong is based on HIBOR, and then Australia is based on BBSW. UK, I think, is SONIA. Singapore is SIBOR. It depends on the different regions. China is the PBOC rate, right? The different places have different benchmark. Do you have plan for the Kai Tak residential project, right? Looking at market condition, right, do you have a plan to do some revaluation of the project? I mean. I think the most likely we will launch that next year. I think we are trying to get ourselves. Yeah. Our product is a little different from the other product. Our product is going to be, in terms of lump sum, the lowest in the area, because as the size of our apartments are, you know, like 350 sq ft size. What we are trying to do is to come up with a product which is where buyers can borrow 90%, right, from the banks. You can calculate roughly what the lump sum is. I don't want to pre-empt my sales team on the launch, but I think you'll find that our product will be relatively competitive from a lump sum perspective compared to the other developers. Yeah. In terms of the destocking, right, or sell down your inventory, how aggressive you're going to cut down your inventory? Are you going to lower the price? I think it's not about lowering the price. I think there will be more marketing spend to actually. I mean, a lot of our inventory is actually in Australia and in U.K. Singapore, the last time I looked at the Hill on Holland project, we only have 11 units left. It's almost digested. Now, that's why our pre-sales number is actually pretty good. Hong Kong, there are some inventory. Hong Kong is tough at the moment. It's a bit slow. The fundamental of Hong Kong, I think a lot of people may not be aware, there's still a 1 million-plus household in Hong Kong which do not own their properties. The key at the moment is affordability, right? With the rise in interest rate in Hong Kong, people are like: "Oh, you know, do I rent first and then buy later?" Actually, we've seen a trend of basically, the investor market, coming into, basically, the what we call the BTR segment, the built-to-rent segment. Not only in overseas, but you know, UK, very active BTR market now, also Australia, very active BTR market. I think that you probably will find some BTR project here in Hong Kong as well. Right now, if you ask me, I think it is not. It's a very cautious approach to Hong Kong by a lot of developers. I don't see people, like, cutting prices, because they know that... We've seen a lot of cycles in Hong Kong, right? Hong Kong is the fundamental, is that there is a shortage. There is still a shortage, yeah. It's just affordability. How do you make it more affordable, right? Yeah. Thank you, Mr. Hoong. If you have any other questions, please raise your hand. Thank you. Can you elaborate a bit more on BC Invest? I think it's, it stores more cash back security. Do you have a recourse? No, it's non-recourse. It's a platform. BC was set up as a non-bank platform, lending platform. What it does is that you arrange the facility from financial institutions, and we then originate the loan, manage the loan, do the credit assessment. Then you build a portfolio, and then you securitize it by doing an RMBS. The money then goes back to the bank. We pay down the so-called bridge or warehouse financing, then you free up the facility, and then you originate a new loan. You need to grow, you need a lot of facilities, and you need to keep issuing RMBS. Our business is we take the net interest margin, right? We don't take the risk. It's like an asset manager, right? It's like, you know, Fidelity. You manage, you have a AUM. You take a fee from the AUM. In our case, the asset is mortgage loan. Residential mortgage loan is the asset. We originate the asset at hopefully a higher rate than your cost, right? You take the net interest margin as your income. You need to build an infrastructure to facilitate that. When we did that, you know, initially, we thought, you know, we will facilitate our customers, but the business is growing so well that we expanded the team. We are now actually, we are one of the largest platform in Australia now. Yeah. Thank you so much, Mr. Hoong. This comes to the end of our investor presentation. Thanks again for joining. Thank you. Thank you very much. Thank you.